Unsatisfactory conduct. Letter of engagement
This is a summary of a decision by a Lawyers Standards Committee under the Lawyers and Conveyancers Act 2006. This summary was published in LawTalk 745.
A lawyer who failed to provide his client in advance with a letter of engagement was found guilty of unsatisfactory conduct and ordered to pay costs.
The Standards Committee found that the lawyer had breached Rule 3.4 of the Rules of Conduct and Client Care. This requires a lawyer, before beginning work for clients, to provide them with written information about the main aspects of client service, including:
- the basis for charging fees, when fees must be paid, and whether the lawyer can deduct fees from funds held in trust for the client;
- the lawyer’s professional indemnity arrangements;
- the coverage provided by the Lawyers’ Fidelity Fund, and whether the client’s funds will be held or used for any purposes not covered by the fund; and
- the procedures used in the lawyer’s practice for handling complaints from clients, and information about the Law Society’s complaints service and how to contact it.
Although the lawyer did not explain why he had failed to provide the information, the Standards Committee was prepared to accept that his failure had not been wilful or reckless. The lawyer’s breach of the rules therefore did not amount to “misconduct” within the meaning of the Lawyers and Conveyancers Act – the Standards Committee found the lawyer guilty of unsatisfactory conduct only.
In deciding on a penalty, the Standards Committee took into account that the requirements in Rule 3.4 were still relatively new. It decided that in the circumstances a fine was inappropriate, but ordered the lawyer to pay the New Zealand Law Society $500 in costs.